March 27, 2011
Agreeing With Bainbridge ... Almost
Readers of this blog know that I'm a big fan of Stephen Bainbridge. And this is despite the fact that we probably disagree on 70% of the issues on which our respective blogs overlap. So, it's nice when I can post about something we appear to agree upon: The Supreme Court's problematic failure to put forth a coherent theory of the corporation to support its various proclamations about what rights corporations do and do not have.
Bainbridge: US law confers personhood on the corporation without a coherent theory of why it does so or where the boundaries of that legal fiction are to be located. As I complained after the recent AT&T decision: Chief Justice Roberts could have summed up his opinion far more succinctly: "Because at least 5 of us say so."
Me: Sooner or later the Court is going to have to take this issue on. Cases involving the rights of corporations aren’t going away any time soon, and ignoring the issue seems almost disingenuous. For example, in Citizens United the majority told us that there was nothing about corporations qua corporations that justified restricting their political speech solely on the basis of their corporate status—corporations, after all, are merely associations of citizens. But in FCC v. AT&T, corporations are effectively deemed to be so obviously different from individuals as to make it almost laughable that they should be understood to have personal privacy rights. Wrote Justice Roberts: “’Personal’ in the phrase ‘personal privacy’ conveys more than just ‘of a person.’ It suggests a type of privacy evocative of human concerns—not the sort usually associated with an entity like, say, AT&T.” Well, before you said it was so in Citizens United, many would not have usually associated a constitutional right to unbridled political speech with corporations, as evidenced by the seemingly common response to the opinion: “Who knew that corporations were entitled to the same right to free speech that individual citizens are?”
However, having noted an apparent point of agreement, I must raise a question about Bainbridge's further assertion in the post linked to above:
Corporations have the same obligation to obey the law as natural persons.
To the extent that corporations don't actually exist and thus can't be physically put in jail, this seems not quite correct. Furthermore, the actual human decisionmakers and "owners" often appear to be significantly immunized from jail for corporate malfeasance because of the responsibility dilution inherent in doing business in the corporate form. This is obviously to a significant degree an empirical question, but I'm certainly not going to take at face value the assertion that corporations are precisely as subject to the law as natural persons. Particularly when that assertion is trotted out in support of fending off attempts to regulate corporations more rigorously because, "They have no soul to save and they have no body to incarcerate."
Thanks for the kind words. As for the point of contention, your argument is well-taken. In response, however, I would point out that corporations can be fined and sued. In the extreme case, to the point of being forced out of business (e.g., Arthur Anderson), although admittedly that is rare. So surely it can't be the case that corporations are free to ignore the law either.
Posted by: Stephen Bainbridge | Mar 28, 2011 11:38:54 AM
The problem with the non-personhood argument regarding corporations is that if you exclcude corporations from personhood for political purposes, you also have to exclude every other group of people. Thus, nobody other than individual persons would be allowed to engage in political activity of a monetary nature. That would also exclude the Republican and Democratic parties, which are not persons either. The ability of the citizenry to organize and be heard would be effectively stifled.
Not to mention the fact that the Citizens United v. FEC case was actually about banning movies here in the land of free speech, not corporate personhood. Would the people making the non-personhood argument like to ban political books as well ? Those are also published by "non-person" corporations.
Posted by: Da King | Mar 29, 2011 11:24:26 AM
I actually agree with a lot of your comment, King. My focus is more on whether there are good reasons to limit the rights of corporate persons as compared to natural persons in particular cases. As you can surmise from my posts, I believe there are.
Posted by: Stefan Padfield | Mar 30, 2011 8:50:37 AM